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giants, along with online shopping portal eBay, have bought Microsoft-specified, preconfigured "cloud-in-a-box" appliances designed to let them run Microsoft's Platform as a Service (PaaS) offering from their own premises.

Microsoft is the first and only company that offers customers and partners a full range of cloud capabilities and the flexibility to deploy these services where and how they wish.

Bib Muglia, chief of Microsoft's Server and Tools division

Announced at the Microsoft Worldwide Partner Conference, the Windows Azure Platform Appliance is not for the faint of heart, nor is it available to the general public. Microsoft said it is targeting IT organizations that buy hundreds or thousands of servers at a time, like governments, service providers and very large enterprises.

No details about the hardware, networking or software were revealed, but current customers are Dell, HP, Fujitsu and eBay. eBay will be installing the Azure appliances in two of its data centers after testing its capabilities by hosting part of its site on the public, Microsoft-run platform.

"For enterprise and government infrastructure and operations professionals, this announcement brings greater degrees of freedom in using Windows Azure, but it won't bring Azure in-house for more than the few very largest companies...at least not yet," said Forrester principal analyst James Staten in a blog post about the announcement.

Staten characterized the move as aimed at mollifying Microsoft's partners, who have not responded well to having to compete directly with Redmond for software services.

The move allows giants like HP and Fujitsu a bite of Microsoft's cloud apple while letting Microsoft continue to gather momentum with its new fleet of cloud services: Azure, Business Productivity Online Standard Suite (BPOS) and Office Online (Skydrive). If irritated by the competition, HP and Fujitsu could prioritize alternative cloud technologies over Microsoft, but demand for Microsoft's products and software remains strong.

Dell, HP and Fujitsu will offer Azure services out of their own data centers to enterprise customers under undisclosed terms. The appliance is highly managed by Microsoft; buyers reportedly will pay Microsoft for services, as well as the hardware and software stack to run Azure in-house. Microsoft has been secretive about the underlying technology in Azure and clearly plans to remain firmly in control as Azure deploys outside its walls.

Want to buy one? You can't. Microsoft has said the appliance is in "limited production release" to only a small set of customers and partners. Future plans for the appliance are to be determined. From the Azure appliance website: "We will develop our roadmap depending on what we learn from this set of customers and partners. We have no additional details to share at this time."

More on Azure:

Microsoft is covering other bases in private cloud, as well. It also announced the release of its System Center Virtual Machine Manager Self Service Portal, formerly the Dynamic Data Center Toolkit, which is an infrastructure and automation toolkit designed to run in a Windows Server 2008 data center and allow self-service for virtualized servers, monitoring and other features associated with cloud computing. The beta release of Server 2008 R2 Service Pack 1 also went out, with a heavy emphasis on virtualization and integration updates.

Microsoft is making strong claims for the appliance and for its position on cloud. CEO Steve Ballmer declared Microsoft "all in" on the cloud in March and said he was betting the company on cloud computing.

Bob Muglia, chief of Microsoft's Server and Tools division, said that Azure-in-a-box represents Microsoft's commitment to serving every side of its business.

"Microsoft is the first and only company that offers customers and partners a full range of cloud capabilities and the flexibility to deploy these services where and how they wish," Muglia said -- a claim that some may find difficult to swallow.

Competitors like IBM and Oracle and the EMC/Cisco/VMware coalition have their own cloud-in-a-box products and online services, although none of those have the ubiquity of Microsoft on the desktop and in the office.

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